Govindaraju Naidu and Others vs Subbulakshmi and Others

Natarajan, J.—The appeals and the cross-objections relate to the same item of property though the relefs sought for in the suits, out of which these appeals have arisen, were under different claims. The property in dispute is indeed a very small one, being a vacant site measuring 16 east to west and 55� north to south. It belonged to one Venkatasubrammania Iyer who left behind him his widow Lalithambal, two sons, Pichai alias Venkateswara Iyer and Venkatraman, and three daughters, Subbalakshmi, Meenakshi and minor Vijayalakshmi. On 17th February, 1956, Venkatasubramania Iyer and his two sons, the younger of whom was then a minor and. represented by the father himself, executed an othi deed in favour of Govindarajulu Naidu (the Plaintiff in Original Suit No. 378 of 1966 on the file of the trial Court and Appellant in Second Appeal No. 1437 of 1971) for a sum of Rs. 600. The othi was redeemable in seven years. After Venkatasubramaniam''s death, his major son Pichai sold his undivided one-third share of his brother-in-law (sister''s husband) Sivaramakrishnan. Venkatasubramaniam''s wife Lalithanbal, the second son Venkataraman and son-in-law Sivaramakrishnan agreed to sell the vacant site to Govindarajulu Naidu for a sum of Rs. 4,000 are received an advanced of Rs. 500 on 19th August 1963. The agreement of sale was not reduced to writing, but the vendors issued a receipt in favour of Govindarajulu Naidu for the sum of Rs. 500 received an advance and in that receipt they incorporated the terms and conditions of the sale.

Govindarajulu Naidu instituted Original Suit No. 378 of 1966 for specific performance of the agreement of sale. Originally, Lalithambal, Venkataraman and Sivaramakrishnan were alone made parties to the suit, but subsequently, the daughters of Venkatasubramaniam were also made parties as they also claimed shares in the vacant site. The defence of Defendants 1 to 3 in the suit was that the contract of sale related only to a portion of the vacant site measuring 13'' east to, west and 55'' north to south, end a pathway measuring 3'' east to west and 55'' north to south of a right therein was nor agreed to be sold. As the Plaintiff insisted that the agreement of sale included the pathway space also, the not could not he effected and therefore, the Plaintiff was guilty of breech of contract. The defence of the daughters, viz. Defendants 4 to 6, was that the vacant site was the self-acquired property of their father and therefore, they were entitled to a half share in it and as such, the agreement of sale would releat only to one half of the suit site.

In the trial of the suit, the Plaintiff Govindarajulu filed a memo stating that he would be satisfied if a decree was passed for specific performance in respect of the shares due to Defendants 1 to 3 in the A schedule property (total extent of 16'' X 55'') or, in the alternative, in the ''B'' schedule property (total extent minus the pathway space) and he was willing to pay even for the proportionate shares the entire sale consideration as mentioned in exhibit A-2 and he would relinquish his claim to the shares of Defendants 4 to 6 in the property.

The District Munsif, Thirumangalam, who tried the suit, held that the vacant site was not the self-acquired property of Venkatasubramiaam, Iyer but was joint family property, that as such the three daughters were entitled to only three-eighteenths share therein that the above said share would not be covered by the agreement of sale, that, in addition, Pichai''s one-eighteenth share accrued to him after the death of his father, was also not covered by the agreement of sale and, therefore, the Plaintiff would be entitled to specific performance only in respect of seven-ninths share. He further held that the agreement of sale related, not only to the space of 13'' x 55'', but also to a right in the common pathway of 3'' x 55''. Accordingly he gave judgment in favour of the Plaintiff for specific performance. Against that judgment and decree two appeals were preferred by the Defendants, Defendants 1 to 3 and 6 filing Appeal Suit No. 228 of 1969 and Defendants 4 and 5 filling Appeal Suit No. 280 of 1970. The Subordinate Judge of Madurai, who heard the appeals, disposed them of by a common judgment. He allowed Appeal Suit No. 228 of 1969 in part and held that a right in the pathway was not included in the agreement of sale. Subject to this modification, he confirmed to the trial Court''s decree. Appeal Suit No. 280 of 1970 was dismissed Against the judgment in Appeal suit No. 280 of 1970, Defendants 4 to 6 have preferred Second Appeal No. 1506 of 1972 and the Plaintiff Govindarajulu has preferred the memorandum of cross-objections.

Some months after Govnrdarajulu Naidn filed Original Suit No.378 of 1966 for specific performance, the daughters of Venkatasubramaniam (Defendants 4 to 6) filed Original Suit No.239 of 1967 for redemption of the othi dated 17th February 1956. They contended that as daughters, they constituted one branch of heirs of Venkatasubramaniam Iyer that they were entitled to redeem the othi and that as the other heirs were not willing to discharge the mortgage they were coming forward with the suit for redemption. They impleaded in that suit the mortgagee Govindarajulu Naidu, their brother, mother and the vendee of Pichai''s share. The mortgagee''s defence to that suit was that on account of the agreement of sale in his favour, the right of redemption had become merged therein, that the mortgage was no longer subsisting and that the suit itself was a mala fide one filed at the instance of the other Defendants to defeat his right of specific performance. The trial court decreed the suit for redemption and that decree was confirmed by the appellate Judge in Appeal Suit No.201 of 1969 filed by the first defednant Govindarajulu Naidu. Second Appeal No. 1437 of 1971 arises out of this judgment and has been filed by the mortgagee Govindarajulu Naidu.

The questions which arise for consideration in the appeals are:

Whether the vacant site was the self-acquired property of Venkatasubramaniam Iyear or joint family property?

Whether the agreement of sale related to 16'' x 55'', or 13'' x 55'' with a right of pathway in the remaining space, or only to 13'' x 55''?

Whether there had been any breach of the agreement of sale by Govindarajulu Naidu? and

Whether the daughters of Venkatasubramaniam are entitled to file a suit for redemption after the other shares had agreed to sell their shares in the vacant site to the mortgagee?

(7) On the question whether Govindarjulu Naidu had commit any breach of the contract of sale, the answer presents no problem. The trial Judge as well as the Appellate Judge have both found in favour of the mortgagee and held that there was no breach of contract on his part. As a matter of fact, it is seen that he had even prepared craft sale deeds (exhibits A 13 and A 14) and sent them for approval by the vendors. The criticism leveled against the vendee, viz., that he had claimed a right of way in the passage in excess of the terms of the agreement of sale, has been, found to be a baseless one for in the draft sale deeds, exhibits A-13 and A-14, the third Defendant Sivaramakrishnan had himself interlineated words to the effect that the sale would include a pathway right also. Having regard to the concurrent findings of the courts below that no breach had been committed by Govindarajulu, Naidu it must be held that he would be entitled to a decree for specific performance in the light of the findings on the other questions.

Passing on now, to the question whether the vacant site was the self-acquired property of Venkatasubramaniam Iyer or joint family property, there is no direct evidence to clinch the issue one way or the other. It is common ground that of the site was self-acquired property, the widow and the five children of Venkatasubramaniam would each be entitled to an one-sixth share and consequently, the three daughters would be entitled to three-sixths share in all. Alternatively, if it is to be held joint family property, then, the share of each of the daughters would be only one-sixth of the one-third share of Venkatasubramaniam, and the total would only come to three-eighteenths or one-sixth. Pursuant to a compromise entered with his sister, Venkatasubramaniam Iyer had purchased the vacant site at an anterior point of time. Because the sale deed stood in his name, the contention of the daughters was that it was his self-acquired property. But, it transpires in evidence that Venkatasubramaniam Iyer was the heaf of the joint family comprising of himself his and his sons and the joint family comprising of himself and his sons and the joint family owned other items of properties even before the vacant site wag purchased. It, is, therefore, most likely that the suit site was also purchased from out of the income derived from joint family properties. That inference can only be on surmise. There is, however, definite evidence in the case to infer that even if the she had been acquired by Venkatasubramaniam Iyer from out of his own funds, he had, neverthless, thrown it into-the common hotch-pot and treated it as joint family property This can be gathered from the contents of the othi deed exhibit A-1. The deed was executed, not only by Venkatasubramaniam, but also by his two sons. Such a course would not have been followed unless he had treated the site as joint family property. As observed in S. Parthasarathi Vs. Commissioner of Income Tax, Madras, it is always open to a Mitakshara father to treat his self-acquired property as ancestral property and thereby recognise the right of the other coparceners to shares therein. Learned Counsel appearing for the daughters would contended that the inclusion of the sons may have been at the instance of the mortgagee. But, there is no material to accept this contention. Besides, there is also exhibit A-3 which is a sale deed executed by Pichai in favour of his brother-in-law Sivaramakrishnan, wherein he conveyed his one-third share in the suit site. The recital in that document is that the suit site belonged to him, his brother and mother as ancestral property. That recital would also indicate the manner in which the parties treated the suit property. The contesting Defendants had not established in the suit that Venkatasubramaniam was possessed of other means, apart from the income derived from the pint family properties from out of which he could have purchased the suit property. Having regard to all these things the findings should naturally be that the suit site was only pint family property, and not the separate property of Veatasubramaniam. The three daughters would, therefore, be entitled only to a share in the one-third share of their father and the total shares of all the three of them would only came to three-eighteenths or one-sixth.

Turning, now, to the controversy regarding the exten to be sold, exhibit A-2 makes reference only to an extent of 13'' x 55'' and the passage space is clearly excluded. Merely because, in the draft sale deeds, exhibits A-13 and A-14, certain recitals by way of inter-lineation are found which lend support to the Plaintiff''s contention that a right of way in the reserved space was also included, it cannot be held that the agreement of sale included within it a right of user in the pathway space. The Plaintiff''s right of specific performance has to be determined with reference to the terms of the agreement contained in exhibit A-2. From that stand-point, the Plaintiff would only be entitled to ask for specific performance of such portion of the property as belongs to his vendors in the extent of the site measuring 13'' x 55''.

The last of the questions is the one which preset complications and considerable argument has been advanced by both sides in support of their respective contentions. On behalf of the daughters who seek redemption of the othi it is contended that the mortgagee had not acquired any interest in the land aid therefore, they are entitled to redeem the mortgage. On the other hand, the plea put forward on behalf of the mortgagee is that the agreement by some of the sharers to sell their share in the suit site to the mortgagee created an intent in him, in the property and as such, the integrity of me mortgage was broken and the suit for redemption cannot lie, Mr. A. Varadarajan, learned Counsel for the mortgagee, relies on Mamu v. Kattu ILR 6 Mad. 61 and Narayanaswami v. Perumal AIR 1953 Mad. 720 in support of his contention, in the earlier case (ii) It was held that where a mortgagee in possession acquires a right to a share in the property mortgaged, he cannot be compelled to surrender the mortgaged property on payment of the debt, or any part of it on payment of a proportionate amount of the debt, until the mortgagor has, by a proper suit for partition, ascertained definitely the shares of the co-owners. In the later case (ii) it was held that when a mortgagee had subsequently acquired the share of one of the brothers who had mortgaged the property, the integrity of the mortgage was broken, and as such, a suit for redemption cannot lie and the proper remedy for a part seeking redemption would be to sue for partition and redemption of his share only. Learned Counsel appearing for the two sets of Defendants attempt to get over these decisions by pointing out that in those cases the mortgagee had a completed sale in his favour of the share of one of the mortgagors and had thus acquired an interest in the mortgaged property, whereas, in the present case, the mortgagee had only an agreement on sale in his favour which u/s 54 of the Transfer of Property Act, would not create any interest in immovable property. In support of this contention, the observation of the Supreme Court in Rambaran Prosad Vs. Ram Mohit Hazra and Others, is quoted. It runs as follows:

Reading Section 14 along with Section 54 of the Trans, for of Property Act, it is manifest that a mere contract for sale of immovable property does not create any interest in the immovable property.

My attention is also invited to Govinda Chandra Ghose Vs. Provabati Ghose, where a single Judge of the Calcutta High Court has held that even a decree passed in a suit for specific performance of a contract for sale of immovable property would not create an interest in the property in favour of the decree-holder. On a consideration of the matter, I find that the plea of the mortgagee''s counsel is the mere acceptable one. It is no doubt, true that the general law is that a mere agreement of sale will not create an interest in the property agreed to be sold in favour of the would be purchaser. But, this rule will have exceptions, depending upon special features. Dealing with a similar question which arose in an application under order XXI Rule 89 of the CPC in Rabindra Nath v. Harendra Kumar AIR 1956 Cal. 452 (sic) P.B. Mukharij, J. pointed out the circumstances under which an agreement of sale will have the effect of creating an interest in the property agreed to be sold. The passage (sic) as follows:

The answer to this question depends on the nature of the agreement for sale in each case. The language of Section 54 emphasizes that ''of itself'' a contract for sale does not Create any interest or charge on the property, But, very often, a contract for sale does not stand by itself where there is a part payment of the purchase price or payment of what is called the earnest money. In that event, Section 55(6)(b) Transfer of Property Act would be attracted and it will be treated as though the ownership of the property had passed and there is a charge for part of the purchase money paid.

I am clearly of opinion that the same rule would apply to the facts of the instant case also. The mortgagee had paid a sum of Rs.500 as earnest money when he entered into the agreement, of sale. He was already in possession of the land as mortgagee and from the date of the agreement of sale, he was entitled to convert his possession, at least partially or in respect of a portion of the property, into one in pursuance of the Sale agreement and invoke the doctrine of part performance to his aid to retain possession of the property. To the extent the mortgagee had performed his part of the agreement of sale, there will be a transfer of interest in his favour and he will also be entitled to a charge for the portion of the purchase money paid by him. These features take the agreement of sale in favour of the mortgagee out of the scope of a bare agreement of sale contemplated u/s 54 of the Transfer of Property Act. I am fortified in may view by the decision rendered in Devisahai Premraj Mahajan Vs. Govindrao Balwantrao and Others, . Therein a Division Bench of the Madhya Pradesh High Court held that even an unregistered draft sale deed, although not strictly in the form of an agreement, would undoubtedly, constitute a writing duly signed and can be construed as document in writing evidencing the terms of a contract of sale thereby attracting to it the doctrine of part performance enunciated in Section 53-A of the Transfer of Property Act, The result would be that the daughters will cot be entitled to redeem the othi in view of the Subsequent acquisition of interest in a portion of the mortgaged property by the mortgagee.

The mortgagee''s Counsel places reliance on two other cases as well to contend that after the agreeing t of sale the it of (sic) became extinguished wholly or in part Meenakshi Velu v. Sakunthala AIR 1963 M.P. 275, the first of the cases cited lays down that a mortgagers right to redeem the mortgage does not survive after the mortgageehad exsrsised his power of sale u/s 69 of the Transfer of Property Act, and the of only right that would remain for the mortgagor is only over the surplus of the sale proceeds. I do not think the ratio in this case will have any application to the facts of the instant case. No sale has taken place and the interest of the third-party purchaser has not intervened. The other case referred to is Bank of Poona v. Nav Rajastan Co-operative Housing Society Ltd. ILR (1968) Bom. 706. That was a case where an alienee of the mortgagor of a portion of the mortgaged property sought to redeem the entire mortgage against the mortgagee who had brought the mortgaged property for sale and purchased it in execution of the decree. It was found in that case that the sale in favour of the lienee was with reference to specific aitems of the mortgaged property. Having regard to that feature the Court held that the alienee was not entitled to redeem the whole of the mortgaged property, but was entitled to redeem only the specific item of property purchased by him on payment of the proportionate amount of the mortgage dues. This authority too is of no use to the mortgagee, for in the instant case the mortgaged property, a portion of which has been agreed to be sold, is a single item wherein the shares of the partief have to be worked out in partition proceeding.

In the result, I find in Second Appeal No. 1437 of 1971 that the daughters, the Plaintiffs in Original Suit No. 239 of 1957, will not be entitled to a decree for redemption The Courts below have not property construed the right acquired by the mortgagee in the mortgaged property pursuant to the agreement of sale in his favour. The daughters would only be entitled to file a suit for partition of their shares in the mortgaged property and co-extensively ask for redemption of their shares by payment of the requisite amount Notwithstanding this findings, I am averse to dismiss the suit by the daughters without further thought on the matter. Having regard to the long drawn out controversy between the parties and the small extent of the suit property it would not be in the interests of justice to make the daughters and the mortgagee go over the ordeal of a suit for partition once again. I would therefore convert the suit for redemption into one for partition and declare that the daughters would each be entitled to an one-eighteenth share in the extent of property measuring 13'' x 55'' together with a right of way in the pathway space of 3'' x 35''. There will, accordingly be a preliminary decree in favour of the daughters, After their rights are worked out in final decree proceedings, the mortgagee will be entitled to execute the decree for specific performance in his favout. That will dispose of Second Appeal No. 1437 of 1971. Each party will bear his or her costs throughout.

In so far as Second Appeal No. 1506 of 1972 is concerned, I have already held that the mortgagee will be entitled to ask for specific performance of the sale agreement in his favout, the right, however, being confined to the shares of Lalithambal. Venkataraman and Sivaramakrishnan in the portion of the vacant site excluding the pathway space of 3'' x 55''. The sale agreement does not cover the one-eighteenth shire of Pichai in the suit property derived by him after his fathers'' death. That portion of the property will also be delivered to the mortgagee in the final decree proceedings, since he will be entitled to be in possession of the same as mortgagee even though it is not covered by the agreement of sale. Second Appeal No. 1506 of 1972 by the daughters will therefore stand dismissed. But, there will be ho order as to costs therein.

The memorandum of cross objections by the mortgagee, which relates to a right of way in the pathway must also fail in view of the finding already given. Accordingly, it will stand dismissed, without costs.

No leave in enter of the second appeals.